The budget: a tale of two taxpayers
Your post-budget calculations (Money, last week) hardly support the CBI’s claim that the 50% rate of income tax is unreasonable. What they do reveal is that the wealthy pay surprisingly little more of their income in tax than average earners.
The single person on your chart earning £30,000 pays 25% of his/her entire salary, while the example who earns £200,000 pays 42%. Council tax, however, will typically cost the lower earner a further 5% of his/her income but your higher earner probably about 1%.
This narrows the total taxation of their incomes to 30% and 43% respectively. The abolition of the 50% income tax rate would result in an almost identical 30% and 33%. But this is far from a fair “flat rate” system of taxation.
The person on £30,000 has little choice but to pay the tax and juggle what remains to cover the rising costs of housing, food, utilities and other essentials. In contrast, £200,000 allows a range of opportunities to minimise taxation: full tax relief on huge pension contributions, unlimited capital gains tax relief on trading up to an ever-grander home, not to mention assorted reliefs on inheritance tax.
Not only do all such “reliefs” have to paid for by other people’s taxes, but because they are of practical help only to an already privileged minority they are arguably a much greater obstacle to so-called “social mobility” than, for example, private education.
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Do George Osborne and Vince Cable truly have the courage for a flat-rate system of low taxes on income, capital gains and inheritances without all of the cosy, market-distorting “reliefs” available only to the very rich? For example the average council tax of about 0.7% of a home’s value could be replaced by an equivalent and much fairer annual levy on all property and assets. It is ironic that the greatest opposition to the Osborne/Cable plans for simpler, lower, transparent and “loophole-free” flat-rate taxes is very possibly going to come from the truly wealthy.
Aidan Harrison, Rothbury, Northumberland
A “squeezed” single person with an income of £50,000 will have a net loss of £31 over two years? As a disabled pensioner with an income lower than the average, my heart bleeds.
Susan Boothroyd, Chesterfield, Derbyshire
Big isn’t any better with wind power
Your article on windfarms managed to avoid the fundamental truth about generating electricity from wind (“Giant steps towards a low-carbon future”, last week). It is erratic, unreliable and unpredictable. It always was and it always will be.
Imagine the furore if power stations were only supplied with fuel on average two days a week and some weeks not at all. Unless, of course, comments from Steve Holliday, the head of National Grid, are meant to imply that this is precisely what we can expect in the future.
Wind turbines depend on massive subsidies from you and me, otherwise they are totally uneconomic. Shell has already pulled out of the London Array scheme, so one suspects that even with the subsidies and renewables obligation certificates, the economics are borderline.
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The article suggests that making wind turbines even more gigantic will somehow solve the problem; frankly, making them as tall as the Empire State Building won’t make an iota of difference. As I write, the contribution that wind is making to electricity demand is the same as before Christmas 2010 — 0.1%.
David Simmons, Cambridge
Cistern system not in the first flush
I wouldn’t be too sure that humanity took 150 years to think of the toilet cistern filled via a handbasin on top, now available at B&Q (Interview, last week.) I first saw one 25 years ago in Japan, where space is at a premium. I only pray that the type of WC to which it was connected doesn’t catch on here.
Steve Milner, Whitley Bay, Tyne and Wear
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